This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: If we want to get some idea about a default premium over time between two specific assets, we can ... (Read 83 times)

bclement10

  • Hero Member
  • *****
  • Posts: 560
on: Jul 10, 2018
If we want to get some idea about a default premium over time between two specific assets, we can compare the returns on short-term or medium-term bonds with those on large company stocks.
 
  Indicate whether the statement is true or false.

Question 2

Which of the four interest rate components had the greatest average percentage in the period from 1950-1999?
 
  A) Real rate
  B) Inflation premium
  C) Historical interest rates
  D) Default premium


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

HandsomeMarc

  • Sr. Member
  • ****
  • Posts: 360
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: FALSE
Explanation: If we want to get some idea about a default premium over time between two specific assets, we can compare the returns with top-rated corporate bonds and U.S. government bonds.

Answer to Question 2

Answer: B
Explanation: B) For the 50-year period from 1950-1999, inflation averaged 4.05, the real rate averaged 1.18, the maturity premium averaged 1.28 (for twenty-year maturity differences), and the default premium averaged 0.49 (for AAA over government bonds).


bclement10

  • Member
  • Posts: 560
Reply 2 on: Jul 10, 2018
YES! Correct, THANKS for helping me on my review

Dnite

  • Member
  • Posts: 297
Reply 3 on: Yesterday
Gracias!

« previous next »
 

Did you know?

The strongest synthetic topical retinoid drug available, tazarotene, is used to treat sun-damaged skin, acne, and psoriasis.

Did you know?

Barbituric acid, the base material of barbiturates, was first synthesized in 1863 by Adolph von Bayer. His company later went on to synthesize aspirin for the first time, and Bayer aspirin is still a popular brand today.

Did you know?

Side effects from substance abuse include nausea, dehydration, reduced productivitiy, and dependence. Though these effects usually worsen over time, the constant need for the substance often overcomes rational thinking.

Did you know?

Children of people with alcoholism are more inclined to drink alcohol or use hard drugs. In fact, they are 400 times more likely to use hard drugs than those who do not have a family history of alcohol addiction.

Did you know?

This year, an estimated 1.4 million Americans will have a new or recurrent heart attack.

Tracking time of marker entry generates a chromosome map Tracking time of marker entry generates a chromosome map
Relationship of the 12 cranial nerves to specific regions of the brain. Relationship of the 12 cranial nerves to specific regions of the brain.
Single-dose drug administration: pharmacokinetic values for this drug are as follows: onset of actio Single-dose drug administration: pharmacokinetic values for this drug are as follows: onset of actio
When young infants hold objects for a long period of time they eventually become habituated to them. When young infants hold objects for a long period of time they eventually become habituated to them.
Zinc-finger nucleases and TALENs bind and cut DNA at specific sequences Zinc-finger nucleases and TALENs bind and cut DNA at specific sequences
Time homework Time homework
Video: Coronary Heart Disease

For a complete list of videos, visit our video library